Yahoo! to Acquire GeoCities
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Terms of the agreement call for Yahoo! to issue 0.3384 shares of Yahoo! common stock, equal to $113.66, for each share of GeoCities common stock. All outstanding options of GeoCities will be converted into Yahoo! options. Completion of the deal is slated for the second quarter of this year. Yahoo! said it expects to take an unspecified one-time charge in the second fiscal quarter of 1999 for acquisition expenses.
Upon completion of the merger, Yahoo! will exchange approximately 10,613,000 shares of Yahoo! common stock for roughly 31,361,000 shares of GeoCities common stock. In addition, Yahoo! will convert approximately 8,945,000 GeoCities stock options into roughly 3,027,000 Yahoo! stock options.
Founded in 1994, GeoCities boasts 3.5 million sites authored and hosted on its network. According to Web measurement firm Media Metrix, GeoCities is one of the top three individual sites on the Internet, with a combined home/work reach of 33.4 percent, as of December 1998.
Santa Clara, Calif. -based Yahoo! claims more than 35 million unique registrations for its global services, with 167 million page views per day and was founded by Stanford University graduate students Jerry Yang and David Filo in 1994. Yahoo! said that in tandem with GeoCities, it will incorporate powerful editing tools and content published via personal homepages in various services, including Yahoo! Clubs, Yahoo! Classifieds, Yahoo! Shopping, Yahoo! Auctions and other areas. Yahoo! said GeoCities will offer a strategic platform for distributing Yahoo! services to GeoCities' member community, such as shopping, communications, and personalized services.
Tokyo-based SoftBank Corp. is a major stockholder in both companies, with a 30 percent stake in each network. In addition, SoftBank holds shares in Ziff Davis, CyberCash and E*Trade Group.
Today's news positions Yahoo! to more effectively compete with rival portals, who have made significant merger/acquisition announcements recently. @Home's acquisition of Excite, America Online's purchase of Netscape Communications Corp., Compaq Computer Corp. planning to spin off AltaVista, Disney and Infoseek and NBC and Snap! are among the recent superportal alliances.
"GeoCities has built the Web's most popular and widely used community," said Tim Koogle, Yahoo's chairman and chief executive officer. "Through this acquisition, we are accelerating our global leadership position by combining two of the Web's strongest brands and most heavily used services into one powerful offering."
"We are thrilled to be joining the Yahoo! team," said Tom Evans, president and CEO of GeoCities. "This combination will allow us to accelerate our offerings to GeoCities and Yahoo! users worldwide."